Delaware vs Wyoming vs New Mexico LLC: 5-year cost comparison

Year 1 cost breakdown

Annual ongoing cost (years 2-5)

5-year total cost of ownership

Wyoming saves ~$1,068 over Delaware over 5 years. New Mexico saves ~$1,358. Both are real savings.

What you give up by going cheaper

Wyoming

• Less developed case law (Wyoming LLC Act adopts most Delaware concepts but Wyoming courts have less precedent).
• Slightly less recognition by US-counterparties (most still accept; some prefer Delaware).
• Stronger charging-order protection in some scenarios (Wyoming wins here).

New Mexico

• Significantly less developed case law.
• Some US counterparties (VCs, sophisticated B2B clients) prefer Delaware as default.
• Strong privacy: New Mexico does not require public member disclosure (Delaware also does not, but New Mexico is stricter).
• No annual report obligation (genuine simplicity advantage).

When the savings are worth it

Solo non-resident bootstrap founder who will not raise US VC, will not pursue enterprise B2B contracts requiring sophisticated due diligence, and prioritizes ongoing-cost minimization: New Mexico or Wyoming makes sense.

Founder planning VC raise within 24 months, or pursuing enterprise B2B contracts, or wanting to convert to C-corp later for QSBS: Delaware is worth the modest premium for the recognition and case-law depth.

Related resources

• Delaware vs Wyoming LLC: detailed comparison
• Delaware vs New Mexico LLC: detailed comparison
• Delaware LLC cost guide

What does this 5-year cost calculator actually measure?

This calculator estimates the total cost of ownership for a Delaware LLC compared with a Wyoming or New Mexico LLC across a full five-year window, not just the price you pay on day one. Many founders fixate on the formation fee and stop reading there, which is a mistake because the formation fee is the smallest recurring number in the entire model. The Delaware state filing fee is $110, paid once. The number that compounds year after year is the $300 Delaware franchise tax, due every June 1, plus a registered agent renewal and the cost of a CPA who can prepare Form 5472 and the pro forma Form 1120 that a foreign-owned single-member LLC must file. The calculator stacks these recurring items four more times so you see the real lifetime figure instead of an attractive but misleading first-year price.

The reason this matters for a non-resident founder is cash-flow planning. A business plan built on a $407 first-year Delaware cost will be wrong by roughly $4,200 over the following four years, and that gap is large enough to change which state you pick. The tool separates one-time costs from annual costs so you can reason about each layer. Read the output as three blocks:

• Year 1, which carries the one-time formation and filing fees.
• Years 2 through 5, which repeat only the recurring obligations.
• The five-year total, which is the figure you should compare across states.

How should I read the Year 1 input row?

The Year 1 row mixes two kinds of money, and keeping them mentally separate prevents the most common budgeting error. The state filing fee is a fixed government charge of $110 in Delaware, $100 in Wyoming, and $50 in New Mexico. You pay it once and you never pay it again for the same entity. The formation service fee sits on top of that and is a private charge from whoever files the paperwork on your behalf. For Delaware, the calculator uses the $297 one-time figure, which bundles the filing and the first registered-agent term. A founder who reads only the formation-service line and forgets the state fee will undercount, and a founder who adds a separate registered-agent charge in Year 1 when it is already included will double-count. Both errors are easy to make and the row layout is designed to stop them.

The BOI line deserves a specific note because it changed. Beneficial ownership information reporting was a federal requirement for many entities, but under the FinCEN interim final rule of March 26 2025, LLCs formed in the United States are exempt from BOI reporting. For a US-formed Delaware, Wyoming, or New Mexico LLC owned by a non-resident, that line is $0. The calculator keeps the row visible so you understand why your cost is lower than older guides suggest, not because you skipped a step but because the obligation no longer applies to domestic entities. If a formation service quotes you a BOI filing fee for a US-formed LLC, treat that as a reason to ask questions rather than a cost to budget.

Why is the Delaware franchise tax the input that drives the whole result?

The single largest recurring number in the Delaware column is the $300 franchise tax. Unlike a corporation, a Delaware LLC pays a flat annual franchise tax rather than one scaled to shares or assets, so the number is the same whether your LLC earned nothing or earned a great deal. It is due every year on June 1. The calculator multiplies this $300 across years 2 through 5, which is $1,200 of franchise tax alone over the comparison window, before you add a registered agent or a CPA. Wyoming and New Mexico do not carry this charge in the same form, which is the structural reason the two cheaper states pull ahead in the five-year total even though their day-one prices are close to Delaware's.

Reading this input correctly means understanding what happens if you miss the date. A late Delaware franchise tax payment adds a $200 late penalty plus interest of 1.5% per month on the unpaid balance. The calculator models on-time payment, so the figures you see are a floor, not a ceiling. If you are a non-resident in a different time zone with no US-based reminder system, build a buffer into your plan for the risk of a missed June 1 deadline. A practical habit is to treat the franchise tax as due in May so a slipped week still lands before the penalty triggers. The output assumes discipline you have to actually supply, and the penalty math is steep enough that one missed year can erase a chunk of the savings you might otherwise capture by choosing a cheaper state.

How does the CPA line interact with the choice of state?

The CPA cost row is identical across all three states in this model, and that is deliberate. A foreign-owned single-member LLC is treated as a disregarded entity for US tax purposes, which triggers an annual filing of Form 5472 attached to a pro forma Form 1120. That federal obligation follows the owner, not the state, so a Wyoming LLC and a New Mexico LLC owe the same filing as a Delaware LLC. The calculator uses a $500 to $1,200 range for a CPA who handles this correctly, and it sits in every column. Because the line is constant, it does not change which state wins the comparison, but it does change the absolute size of your annual bill, and many first-time founders are surprised that compliance accounting often costs more than every state fee combined.

The reason to take Form 5472 seriously is the penalty. Failure to file a required Form 5472, or filing it substantially incomplete, carries a penalty of $25,000. That figure dwarfs every other number in the calculator, including the entire five-year cost of any single state. When you read the output, treat the CPA line as insurance rather than discretionary spending. The temptation for a bootstrap founder is to skip professional filing in a lean first year, but the downside is not proportional to the saving. A few hundred dollars of CPA fees protects against a five-figure penalty, so the rational move is to fund this line first and economize elsewhere if the budget is tight.

Can you walk through a worked example for a non-resident founder?

Consider a founder living outside the United States who forms a single-member Delaware LLC to run a software business with no US office and no employees. Year 1 looks like this: $110 state filing fee plus a $297 one-time formation package that includes the first registered-agent term, and $0 for BOI because the entity is US-formed and exempt. That is roughly $407 to get operating, and the founder opens a US business account with a provider such as Mercury, Wise, Relay, Lili, or Payoneer, none of which require a US visit. So far the cheaper states would have saved only tens of dollars.

The picture shifts in years 2 through 5. Each of those four years the founder pays the $300 franchise tax, a registered-agent renewal in the $50 to $125 band, and a CPA in the $500 to $1,200 band for the Form 5472 and 1120 package. At mid-range that is about $1,050 a year, or roughly $4,200 across the four years, bringing the Delaware five-year total to about $4,607. Running the same founder through Wyoming lands near $3,539 and New Mexico near $3,249. The worked example shows the savings are real, between roughly $1,068 and $1,358 over five years, but it also shows that the CPA line, which does not change with state, is the heaviest single cost the founder carries.

What are the most common mistakes people make with this calculator?

The first mistake is comparing day-one prices instead of five-year totals. Delaware, Wyoming, and New Mexico all start within about a hundred dollars of each other in Year 1, so a founder who decides on the first-year figure alone learns almost nothing. The gap that matters only appears once the recurring franchise tax, registered agent, and CPA repeat across multiple years. The second mistake is forgetting that the CPA line is constant across states, which leads some founders to expect a cheaper state to also produce cheaper accounting. It will not, because the Form 5472 obligation is federal and owner-driven.

A few further errors recur often enough to list directly:

• Budgeting a BOI fee for a US-formed LLC, which has been exempt since the FinCEN interim final rule of March 26 2025.
• Double-counting the registered agent in Year 1 when the $297 formation package already includes the first term.
• Ignoring the $200 late penalty and 1.5% monthly interest that apply if the June 1 franchise tax slips.
• Treating the $25,000 Form 5472 penalty as a remote risk and skipping the CPA line to save money.
• Assuming a free EIN is instant when the SS-4 route for an applicant without an SSN typically takes about 8 to 10 business days.

How does the EIN factor into the timeline and cost?

The calculator does not charge for an Employer Identification Number because the EIN is free directly from the IRS, and that is worth stating plainly because a number of services quote a fee for it. A US person with a Social Security number can obtain an EIN online in minutes. A non-resident founder without an SSN instead files Form SS-4 by fax or mail, and that process typically takes about 8 to 10 business days to return the number. There is no government charge at any point, so any line item labeled as an EIN fee is a service markup rather than a true cost, and you can decline it without affecting your filing.

The reason the EIN belongs in your planning even though it is free is sequencing. You generally cannot open a US business account with Mercury, Wise, Relay, Lili, or Payoneer until you hold an EIN, and you cannot complete the bank application before the LLC itself is formed. So the realistic order is form the LLC, obtain the EIN, then open the account, and the 8 to 10 business day SS-4 turnaround is the step most likely to stall a non-resident. The dollar cost is zero, but the time cost is real, and a founder who needs to invoice a client quickly should start the EIN request the moment the formation is confirmed rather than waiting until the bank application asks for it.

What does each output number actually include?

The annual total in the calculator is a mid-range estimate, not a quote, and reading it correctly means knowing which bands it averages. The registered-agent line spans $50 to $125 because providers price differently, and the calculator uses a middle value. The CPA line spans $500 to $1,200 for the same reason, since a straightforward single-member filing sits near the bottom of that range and a more involved situation sits higher. The Delaware franchise tax is the only recurring number that is fixed rather than a range, at $300, which is why it anchors the column. When you see an annual total of about $1,050 for Delaware, that is the sum of a fixed $300, a mid-band registered agent, and a mid-band CPA.

The five-year total combines a single Year 1 figure with four repetitions of the annual figure. It deliberately excludes a few things so you do not mistake an estimate for a guarantee. It does not include state income tax, which depends on where you actually conduct business and is a separate analysis. It does not include the cost of amendments, a registered-agent change, or a dissolution at the end of the period. It does not include any penalty, because penalties are avoidable and the model assumes on-time compliance. Treat the output as a clean baseline for comparing states under good behavior, then add your own line items for anything specific to your situation.

What edge cases change the numbers the calculator shows?

Several situations push your real cost away from the mid-range output, and it helps to know them before you rely on the figure. A multi-member LLC files differently from the single-member disregarded entity assumed here, which can raise the CPA line. An LLC that elects to be taxed as a corporation changes the federal filing entirely and can alter both the forms and the franchise treatment. A founder who forms late in the calendar year still faces the next June 1 franchise tax on the normal schedule, so a December formation does not buy a full year before the first $300 is due. Each of these moves the result enough that you should re-run your own numbers rather than trusting the headline total.

Edge cases also run in the cheaper direction. A founder who is comfortable preparing filings without a CPA, and whose situation genuinely supports that, removes the heaviest line in every column, which compresses the gap between states. A founder who never misses a deadline avoids every penalty the model already excludes. And a founder who picks New Mexico, which carries no annual report obligation, removes one recurring administrative task entirely. The point of surfacing edge cases is not to undermine the calculator but to mark its boundaries, so you treat the five-year total as a strong default for a standard single-member non-resident setup and adjust consciously when your facts differ.

How do recognition and case law weigh against the raw savings?

The calculator prices money, but the decision also involves things that do not appear as a fee. Delaware carries deeper case law and wider recognition among US counterparties, which is why some venture investors and sophisticated business clients treat a Delaware entity as the default they expect to see. Wyoming adopts most Delaware LLC concepts and offers strong charging-order protection, but its courts have generated less precedent. New Mexico offers genuine simplicity with no annual report and strong privacy, but its case law is the thinnest of the three. None of this shows up in the five-year total, yet it can matter more than the roughly $1,000 to $1,400 the cheaper states save.

The way to combine the two is to ask what the entity is for. A solo non-resident running a bootstrapped business with no plan to raise US venture capital and no enterprise contracts demanding heavy due diligence can take the Wyoming or New Mexico savings with little downside. A founder who expects a US venture raise within a couple of years, or who wants the option to convert to a C-corporation later for qualified small business stock treatment, is usually better served by Delaware even at the higher five-year cost. Read the calculator as one input among several rather than the deciding vote, because the cheapest entity on paper is not always the one that serves the business plan.

What should I do once I have the result?

The output is a planning number, so the first action is to write the recurring figure into your actual budget rather than admiring it once and forgetting it. Set a calendar reminder for the Delaware franchise tax well ahead of June 1, fund the CPA line for the Form 5472 and 1120 filing before you spend on anything optional, and confirm your registered-agent renewal date so it does not lapse. If you chose a cheaper state, note which recurring obligations it removes so you do not pay for them out of habit. The result is only useful if it turns into scheduled, funded actions rather than a single moment of comparison.

The second action is to pressure-test the assumptions against your own facts before you commit. Confirm that your LLC is genuinely a single-member disregarded entity, because a different structure moves the CPA line. Confirm that you are US-formed and therefore BOI-exempt under the March 26 2025 rule, so you do not pay for a filing you do not owe. Confirm your EIN timeline, since the 8 to 10 business day SS-4 window for a non-resident can delay opening an account with Mercury, Wise, Relay, Lili, or Payoneer. When those three checks hold, the five-year total in front of you is a reliable basis for choosing a state, and you can move from comparing numbers to forming the entity with a clear view of what each year will actually cost.

How should you weigh recognition against the raw five-year number?

The calculator outputs a dollar figure, but the cheapest number is not automatically the right answer. Wyoming and New Mexico come out lower over five years because their annual fees are smaller than Delaware's flat $300 franchise tax. For a founder whose only goal is to hold a US entity at the lowest carrying cost, that gap is real and worth respecting. The tool is honest about it rather than hiding it, because a comparison that always pointed at Delaware would not be a comparison at all.

What the dollar figure cannot show is recognition. US banks, payment processors, and investor counsel see Delaware entities constantly and rarely pause on them, while a less common state sometimes draws an extra verification step. For a founder raising money or selling to US enterprise buyers, that smoother recognition can be worth more than the few hundred dollars a year the calculator saves elsewhere. Read the output as one input into the decision, set beside how the business actually plans to use the entity, rather than as a verdict on its own.

What costs sit outside this calculator entirely?

A few real costs are deliberately left out because they apply the same way regardless of which state you pick, so including them would not change the comparison. The clearest example is the CPA fee for the annual Form 5472 with a pro forma Form 1120, which a foreign-owned single-member LLC owes in any state. The $25,000 penalty for missing that filing also sits outside the model, because it is a risk to avoid rather than a planned line item. Currency conversion and international wire costs are another omission, since they depend on the founder's home country and bank rather than on Delaware.

Treat the calculator as a clean comparison of the state-driven costs and the formation service, then add your own line for the professional help the business will actually use. A founder who layers a realistic CPA cost on top of the calculator output gets a truer five-year picture than the raw number alone, and is far less likely to be surprised in year two when the first franchise tax and the first federal filing arrive together.